UBS Global Asset Management’s US Pension Fund Fitness Tracker, a quarterly estimate of the overall health of a typical U.S. defined benefit pension plan, reports that pension plan funding ratios went on a wild ride, caused by volatility in both equity markets and interest rates. Still, the typical pension fund started 2007 with a funding ratio of approximately 103% and ended the quarter at a slightly improved funding ratio of approximately 105%.
Much like in 2006, the improved health of the typical U.S. defined benefit pension plan in the first quarter was due largely to strong equity market returns. UBS Global Asset Management estimates that the typical large corporate defined benefit plan saw an increase in assets for the quarter of almost 2%, outpacing liabilities, which were roughly flat for the quarter.